DCG Reports 51% Revenue Jump Despite Grayscale Bitcoin ETF Outflows
Digital Currency Group (DCG) has seen its revenue jump 51% year on year and 11% over the quarter, despite Grayscale's flood of Bitcoin ETF outflows.
DCG's revenue came in at $229 million, while Grayscale accounted for $156 million of its first-quarter 2024 revenue. Since Grayscale converted its Bitcoin Trust (GBTC) to an ETF in January, the fund has seen about $17.4 billion in outflows and only two days of inflows.
GBTC, which has the largest AUM of $24.33 billion among its peers, also has the highest fee at 1.50% compared to its competitors, which have fees varying from 0% to 0.30%.
Despite substantial redemptions and a lower management fee due to the Grayscale Bitcoin Trust (GBTC) converting to an ETF, this amount remained relatively unchanged from the prior quarter, largely due to significant increases in bitcoin (BTC) and ether (ETH) prices.
“While Grayscale expected outflows alongside increased competition under the ETF wrapper, Q1 revenue attributable to GBTC nevertheless exceeded our expectations,” the company said in a statement.
DCG's crypto mining pool, Foundry, saw revenue jump 35% while DCG's investing platform, Luno, experienced a revenue increase of 46%.
“The first quarter of 2024 was marked by several exciting developments for our industry, including the approval of Grayscale’s GBTC and spot Bitcoin ETFs in the U.S., and bitcoin prices reaching all-time highs in March. Against this backdrop, we are pleased to showcase a strong start to the year for DCG,” DCG added.
Recently, Grayscale withdrew its Grayscale Ethereum Futures Trust ETF application to the SEC.
In a notice of withdrawal, the crypto asset manager did not state reasons for its withdrawal but did list a number of delays by the SEC in reviewing proposals.
"On November 15, 2023... The Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change," The filing stated.
"On December 18, 2023, the Commission instituted proceedings... To determine whether to approve or disapprove the proposed rule. On March 22, 2024, the Commission designated a longer period for Commission action on the proposed rule change On May 3, 2024, the Exchange withdrew the proposed rule change," it continued.